WeekAheadBondMarket: FGN Bond price to increase as yields fall

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In the just concluded week, the value of FGN bonds traded at the over-the-counter (OTC) segment appreciated (and yields fell) for most maturities tracked amid renewed buy pressure: the 5-year, 14.50% FGN JUL 2021 paper, the 10-year, 16.29% FGN MAR 2027 debt and the 20-year, 16.25% FGN APR 2037 bond rose by N0.70, N1.55 and N2.64 respectively; their corresponding yields decreased to 14.44% (from 14.82%), 14.26% (from 14.58%) and 14.19% (from 14.57%) respectively.

However, 7-year, 13.53% FGN MAR 2025 note remained flattish and its yield unchanged at 14.17%. Elsewhere, the value of the FGN Eurobonds traded at the international capital market depreciated for all maturities tracked amid renewed profit taking activity – the 10-year, 6.75% JAN 28, 2021 paper, the 20-year, 7.69% FEB 23, 2038 and the 30-year, 7.62% NOV 28, 2047 bonds lost N0.07, USD1.55 and USD2.19 respectively; their corresponding yields increased to 4.92% (from 4.90%), 7.98% (from 7.81%) and 8.20% (from 7.99%) respectively.

In the new week, we expect FGN bond prices to increase (with corresponding fall in yields) at the OTC market amid expected ease in financial system liquidity.

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